by Robert Lesser, Direct Impact Marketing

Moving Upstream from B2B Marketing ROI

The lead generation process, where the company’s contacts typically move from a one-way broadcast to a two-way dialogue, offers the opportunity to capture intelligence and metrics while moving prospects through the sales and marketing funnel. It is a critical time for understanding which prospects will qualify for a handoff to sales, which will not, and why. Done right, the actual handoff from marketing to sales can also be evaluated at this time.

Rough Water on the River

When marketing misses ROI expectations, B2B marketers will encounter turbulent waters. To effectively address a large issue such as this, a top-level metric such as ROI needs the support of “diagnostic” metrics that have a direct bearing on marketing ROI and provide insight into overall effectiveness.

Savvy marketers gauge upstream metrics to better understand the dynamics of lead flow. One of the ideal opportunities to assess root cause and potential logjams is in the narrows where leads are passed from marketing to sales.

This article identifies key metrics for measuring the health of the marketing & sales pipeline with practical advice on how to capture these data points. By measuring at appropriate points, B2B marketers should be able to more precisely isolate issues, derive insight and take corrective action.

The River Poles – Testing the Waters

Diagnostic metrics help to assess where the lead flow is constricted or leaking. It is not a matter of ‘pointing fingers’ but in better understanding how marketing and sales can improve ROI through making progress against common objectives.

Chart 1 – Measures & Metrics

Below are a list of measures & metrics that act as indicators of the health of the lead generation process, the sales funnel and lead conversion.

  • Marketing Lead Quality (Sales assessment of Marketing)
    – Rate of discarded leads
    – Direct sales and/or channel satisfaction with lead quality
  • Sales Quality (Customer assessment of Sales)
    – Ability of sales to contact the lead as requested by the lead
    – Sales effectiveness in reaching leads
    – Rate of consideration
    – Prospect & customer satisfaction
  • Sales Cycle or Lag Time (Process tracking)
    – Aging of leads
    – Average time-to-conversion to sale
  • Win / Loss (Results tracking & benchmarking)
    – Conversion rate
    – Deal share vs. competitors
    – Rate of consideration
    – Average revenue/profit per close
    – % deal at price parity, premium or discount

Asking the right question will yield the right answer.

Most often, marketing’s target audience is researched either prior to entering the sales pipeline (e.g. Usage & Attitude Surveys, Share-of-Wallet / Market Sizing Surveys) or after the end user becomes a customer (e.g. Customer Satisfaction or Advocacy Surveys). This article advocates researching end users in the sales pipeline to better understand logjams and leakages.

With limited resources, the approach for most marketers is to start with what metrics that are easily captured and then to broaden the list of metrics based on ease of researching the information, the area where issues reside and budget.

Chart 2 – Questions

The below questions correspond to the metrics outlined in Chart 1. In other words, these are the questions to be asked of prospects during the marketing-to-sales handoff in order to measure the health of the sales funnel. Note that this insight is gained as part of the marketing process and is not intended to be positioned as an anonymous research study. Fortunately research can be conducted while selling which is advantageous as selling is not acceptable in the context of stand-alone research.

The decision tree below follows the paths of a discussion with direct sales, the channel or the prospect and starts with the question: ‘Did the lead convert to a sale?’

Outcome I: Uncertain as there is no closed loop feedback

Unfortunately most B2B marketers are faced with this issue. The feedback from prospects pertaining to these questions can be an eye-opener and provide hard facts to address anecdotal, emotionally-charged feedback from sales or the channel on lead quality.

These questions pertain to those leads that marketing already qualified and passed on to the sales team. Although the intent is to research these questions, the interviewer can attempt to resuscitate dissatisfied leads by playing a customer service role. In addition, this research provides a ‘prospect satisfaction survey’ – a worthwhile acquisition metric versus the standard retention / customer satisfaction survey.

  • Has there been meaningful contact?
  • What was the satisfaction with the quality of the sales interaction?
  • Was the lead discarded prior to contact? …as a result of the contact?
  • If no purchase planned – what happened?
  • If the deal was lost to competitors – To whom? Why? What was the size and composition of the purchase? What is the timing of the prospect’s next evaluation and purchase?

Outcome II: The lead is advancing in the Pipeline

This outcome signified progress in the pipeline but the risk of funnel leakage and poor conversion is still a strong possibility:

  • What stage in the sales pipeline is the lead?
  • What competitors are being considered?
  • What is the level of consideration?
  • What is the age of the lead (in days)?
  • Has the sales cycle lengthened vs. expectations? Why?

Outcome III: The lead converted to a Sale

These questions are typically asked of a prospect to better understand how sales and marketing should refine and improve their process of demand generation. Given that this outcome is ideal, B2B marketers who are higher up the performance measurement learning curve would turn to these questions.

  • What was the time to convert to a sale, the size and composition of the deal?
  • What was the satisfaction with the quality of the sales interaction?
  • What role did marketing play in influencing the sale?

Approaching prospects can be a delicate matter, as their interest in complying with a research request is not motivated by a client relationship. All the same, prospects can be assured that this is an ongoing effort to better address customer interests from an initial engagement right through to an ongoing client relationship.

Prospects must be swiftly interviewed via telephone which is necessitated given the reluctance of prospects and the persuasive nature of this medium.

Many metrics can be measured if your CRM system is the repository of meaningful information. For other metrics and to conserve budget, it is recommended that a sampling approach be utilized.

Downstream Considerations

Upstream metrics cannot act in isolation. These metrics must be assessed with consideration of downstream metrics that quantify the lifetime value of customers. Although a segment may be attractive at the top-of-funnel (high conversion rate, fast sales cycle), that same segment may be a poor customer (low life-time value, high rate of churn).

The implication is that with an overlay of customer segment information on prospect profiles may predicate the amount of resources to acquire that customer and to measure that prospect in the funnel.

Harnessing the River

In their pursuit of marketing ROI, B2B marketers are best served by testing the waters with appropriate upstream metrics that test the strength of the lead handoff from marketing to sales with consideration of downstream metrics that validate the strength of those leads.

Robert Lesser is President of Direct Impact Marketing, an innovative B2B outsourcer that delivers on best practices in demand generation along with the customization of CRM tools. Their clients include all sizes of B2B firms in the technology, professional services and financial services industries.